Advice gap to widen as 60% of advisers turn away clients

A greater focus on diversity can also help attract more talent.

Cary Curtis, CEO at recruitment agency Give A Grad A Go, said: “We know from our own research that 83 per cent of graduates would prefer to work for companies that have a clear diversity and inclusion policy, so that’s definitely something that advice firms should consider."

Jackie Lockie, head of financial planning at the Chartered Institute for Securities & Investment, said: “The profession itself should be reflective of the society that it serves. We’ve got this advice gap already, if we don’t have a diverse population of advisers and paraplanners to serve the public, then the advice gap is only going to get bigger rather than smaller.”

Meanwhile the importance of paraplanners was highlighted by Laura Russell, head of paraplanner development at Succession Wealth.

She said: “They are often the ones with the critical analysis skills and technical knowledge who come up with ideas of how best to meet the client’s objectives. 

“That frees up more of the adviser’s time, which they can then devote to their clients, because they know that their paraplanner can put together all the necessary research and analysis for the advice they want to provide.”

Opposing views

While Octopus Investments found advisers have had to turn away clients, separate research from Fidelity FundsNetwork, out last week, suggested financial advisers were now more likely to take on new clients, compared to before the coronavirus.

A survey of 100 financial advisers by the platform in May found 77 per cent were planning to take on new clients, compared with 67 per cent in January.

This was as more than half (55 per cent) of IFAs predicted an increase in demand for financial advice within the next five years.

Additionally, the platform’s report found three in 10 advisers (31 per cent) were planning to hire new staff in the next five years, compared with 13 per cent in January.

Jackie Boylan, head of FundsNetwork, said: “[The] majority of advisers remain optimistic for the future with most anticipating a rise in the demand for their services over the next three to five years".

Piers Mepsted, managing director at Financial Advice Centre, told FTAdviser he was looking to recruit advisers to "help share and contribute toward the steep rises in FCA levies".

He said: “The objective of bringing on new members of staff is to ultimately increase the profitability of the business, [which] has become more relevant recently with the large increases we have seen in FCA levies and PI”.

But Alistair Cunningham, chartered financial planner at Wingate Financial Planning, noted that unless new employed advisers started producing new business straightaway, recruitment would add to costs.